THE CRUNCH
Palantir delivered a record third quarter, with revenue up 96% year on year to $2.31 billion, its first quarter above $2 billion, and adjusted earnings per share of 44 cents against expectations of 41 cents. The company also raised its full-year revenue guidance. Yet the stock traded slightly down the next day, because the report contained a warning sign: enterprise sales showed signs of slowing.
U.S. commercial revenue surpassed U.S. government revenue for the first time, at $984 million in commercial contracts, up 148% from a year earlier, versus $953 million from the U.S. government. The company credits enterprise appetite for its AI software, which lets firms run frontier models and custom-train open-weight models securely without sharing data with outside AI labs, plus its long-standing practice of embedding its own engineers with customers.
The catch is contract behaviour. CEO Alex Karp told analysts that customers are quicker to deploy but sign shorter contracts, with more room to expand later or cancel. Enterprises are trying AI software fast and skipping the usual procurement bureaucracy, but that cuts both ways.
The clearest soft spot: Palantir closed $1.46 billion of total contract value from U.S. enterprises, down from the record $2.13 billion the previous quarter. The company raised guidance for U.S. commercial revenue to more than $3.559 billion, at least 143% growth, and Karp was dismissive of the churn risk, saying "once you go Palantir, you don't go back."